UK green bank given £200m boost for projects in Africa, India

The UK government has given the Green Investment Bank a £200 million boost to set up a dedicated team to invest in clean energy projects in Africa and India.

Ed Davey, the Secretary of State for Energy and Climate Change, confirmed on Tuesday that the government has set up a joint venture with the bank to expand its overseas operations with the aim of increasing climate finance.

The GIB was established in 2012 with £3.8bn funding from the Treasury to invest in clean energy and energy efficiency projects in the UK.

The bank has also been working with the Department of Energy and Climate Change (DECC) and the Department for International Development (DfID) since 2014, to explore how it can support the UK invest its £3.87bn International Climate Fund (ICF).

The government and the GIB have now reached an agreement to channel £200m from the ICF towards green projects in East Africa, South Africa and India.

Davey was due to say: "I can announce today that DECC plans to create a new pilot joint venture worth £200m over three years to assist in investment of the UK's International Climate Fund. It will focus on renewable energy and energy efficiency projects in developing countries; delivering significant emissions reductions and poverty reduction by supporting economic growth, job creation, and the development of reliable energy infrastructure. And by working with the Green Investment Bank, we can maximise the commercial viability, impact and effectiveness of UK climate finance. And this work has to go hand in hand with reducing incentives for high-carbon energy."

European Union state aid rules prevent the bank from investing in solar power and large-scale onshore wind projects in the UK.

The international arm of the GIB, however, will not be restricted by state aid regulations, according to a spokesman for the bank.

The GIB has already created a dedicated team to identify a potential pipeline of projects.

In statement, Shaun Kingsbury, chief executive of GIB, said: "I am confident that our unique business model, tried and tested in the UK, will have a very positive effect in developing countries, helping them to build vital new green energy infrastructure."